tv Bloomberg West Bloomberg November 23, 2014 3:00pm-4:01pm EST
>> from pier 3 in san francisco, welcome to the best of "bloomberg west," where we focus on innovation, technology and the future of business. i'm emily chang. every weekend we'll bring you the "best of west," the top interviews with the power players in global technology and media companies that are reshaping our world. first to our lead. uber is no stranger to controversy, but this time the ride-sharing service is not clashing with regulators or taxi drivers. instead, a firestorm has erupted over comments uber executive emil michael made at a dinner
with journalists. he said uber should dig up dirt on journalists critical of the company like sarah lacy of pando daily. uber's c.e.o. later took to twitter and said the comments at a recent dinner were terrible and do not represent the company. his remarks showed a lack of leadership and a lack of humanity and a departure from our values and ideals. but at least one prominent uber investor ashton kutcher tweeted what is so wrong about digging up dirt on a shady journalist? i spoke about all of this with sarah lacy, founder and editor of pando daily as well as cory johnson, our editor at large. take a listen. >> i first heard about this from ben smith. the story has been really focused to me and travis and emil. let's not forget, this was said at a table full of journalists. arianna huffington, michael wolff, people from "business insider." one thought this was wrong. one thought this was wrong and wrote a story under intense intimidation, and that was ben
smith of buzzfeed. honestly, when he called me, i was on a business trip in london and i stepped out to talk to him because i have enormous respect for him and i could not imagine what was so important that he needed to talk to me immediately. and i was terrified, and the plan as it was described is not just to dig up dirt. we're not talking about doing a google search. we are talking about a million-dollar budget, a four-to-six staff team to do opposition research on me. that's going through trash. that's following my kids. that is vans parked outside my house. and the idea was, we are going to go at her through her family. we are going to destroy her through her family, and we are going to do it until she backs down, and no one will ever know that uber did this. and one journalist thought this was wrong. as soon as i heard this, i was terrified. but i also thought, thank god he said it to a real journalist, otherwise he would be doing it and i would have no idea. >> i want to know how you're
feeling right now, because you lost your own personal security. security at pando. tell us what you're doing. >> i don't want to deal with details too much, because the point is for my family to be safe. i have two young kids. uber's view was, let's hit her at her one vulnerability, her kids, and they succeeded. i'm terrified. we have had to totally redo the security at my house. i have personal security with me and my children at all times. here is the important thing, right now we are in this media firestorm about this, but emil michael has not been fired. we see right after travis apologizes publicly in twitter it will go away. there is no public record of it. they have their celebrity investor come out and label me as shady. oh, he backs me away from it, but i'm now labeled as a shady journalist. is this really such a bad thing? they are starting to shift the narrative. you can see what travis bragged about at the code conference in may. this is a political campaign. they have hired political operatives. watch "scandal."
watch "house of cards." that is what is happening. when this dies down, there's no repercussions. investors are supporting it. they are going to either go forward with their plan or do something worse. the story i did a warranted one million dollars smear campaign that warranted destroying my family got nowhere near this amount of press. got nowhere near this amount of people saying they were going to take the app off their phone. something bad is going to happen. >> do you think emil should be fired? ken put up a post on twitter. >> exactly. i think the bare minimum we can all agree on is that emil michael should be fired. this is a deep problem within the company. as i have been living this horror for the last several days, what strikes me and what has bothered me about uber is whenever we would cover these stories about assault of female passengers and call the company and ask them, they would say she was dressed provocatively. she was drinking. it was the classic blame and shame the woman psychology.
imagine a woman is attacked in an uber in a way that could dent the company's valuation as much as my first article did. she doesn't have the resources of private security. she can't call you guys and get on tv and get her side of the story told. i feel like this is not about me. this is about journalists. this is about women getting in their cars. this is about a company culture that thinks it can throw money to destroy people's lives and families in the name of a greater valuation, and it's about every single board member and private investor stepping back and being ok with it. people who have met my kids. people who have been at my house. in 15 years of covering the valley, i've never seen anything like this. you have to wonder if the h.p. pre-texting scandal came out, when journalists' phone records were tapped, would there be any outrage? would ashton kutcher be fine with that as well? >> digging up dirt on political candidates, this is a known tactic in political campaigns. emil michael has spent time in washington.
david plouffe has a long history in washington. what should someone like david plouffe be doing to manage this company's reputation and how is it different when it is you and not an aspiring elected official? >> look, i'm not in the political world for a reason. it is incredibly scary. what should he do? it depends on what his goals are. if he wanted uber to be recast as a friendly company, perhaps they should just start changing some of the executives. i don't think you can just put a new ribbon on that. i think it depends on what his goals are. i think, unlike a politician, uber is not running for office. this is a company that we are trusting with our lives. people put their children in ubers to drive them around. women are getting in ubers very late at night, and yes, sometimes they are dressed provocatively, and sometimes they have had something to drink.
that's why they are calling uber. that doesn't mean they should be victimized. if anyone raises questions, their personal life gets destroyed? this is horrifying. >> do you think this was said to a group of journalists, that all of the journalists would disseminate the intimidation, or do you think it was some guy shooting off his mouth? >> it was not a guy shooting off his mouth. i'm confident of that having talked to people at the dinner. he articulated a plan. this was not spur of the moment conversation. it was a plan. i think it was primarily about me. i think i was the first target because i'm a woman and i'm high profile and they knew they could go after my kids. it is one of two things. it is either they were putting the journalists on notice or -- and frankly it would work with a lot of people. they have done other intimidation tactics not this extreme that have worked, or they don't think there is anything wrong with it. what are the plans they wouldn't brag about at a dinner? that's why i have private security right now. >> i want to get back the this question of on versus off the record.
if both parties understood this was off the record, and who knows what the understanding of either side really was. if you hear something this extreme, do you break that journalistic code? >> yes! i don't understand. you and i came from the old world of journalism. i don't understand what has happened with online media today. journalists are confused on where their loyalties lie. they think their loyalty lies to a rich guy that they are covering who is going to lie to them or say something horrific and illegal, that damages someone's family's security off the record, and that trumps that responsibility to the reader. i want to be very clear to any source of mine listening to this, my responsibility is to my readers. >> sarah lacy, founder of pandodaily and our editor at large, cory johnson. lacy says she has no evidence uber actually targeted her. "bloomberg west" has reached out to uber for comment. they have chosen not to provide executives for interviews but have given us statements
doing was trying to have a chilling effect on journalists who would write critically about uber, and i don't think that's appropriate. i was wondering whether uber was taking any disciplinary action with him or not. i guess that is up to uber. >> to that point, you mentioned -- it raises a number of issues. the chilling effect certainly one of them. what are the other big issues you think this raises? >> i'm chairman of the subcommittee and judiciary committee on privacy technology and the law. this is just a basic privacy issue about an individual's right to control who takes privacy information like geolocation. that's what we're talking about here. that has been a lot of focus of mine and how that information is accessed and shared.
it appears they have something called god's view at uber where employees of uber can access geolocation information. it is not clear what purpose it is used for. they say business purposes. i ask them to define that, but they had an incident where an executive from uber had a journalist come to interview him at his office and he told her he had been tracking her there and evidently that speaks to a certain -- >> and he did not seem to think there was a problem with that? amazing. >> that kind of speaks to a certain cluelessness for a company that evidently stores your geolocation information and
it is a little disturbing to say hey, journalists who have come to my office, i have tracked you here. that suggests a little tone deafness. >> senator, do you use uber or have you ever used it? >> i have. i have used uber. >> will you continue to use it? >> i'm going to wait for the answers -- you know, actually when i used uber, it is because my wife uses uber. so it is usually like how are we getting there? you're getting in the car that is coming. >> but if you don't get the answers that you like, will you continue to use it? >> i really have to -- i won't rule out ever using uber. i won't do that today right now. >> in other words, frannie is going to kill you if you can't
take the uber ride. it is an interesting thing. they are a dominant business. >> this is -- i think this might be a wake-up call for them given that the executive told the journalist i've been tracking you on the way over here. it may wake them up a little bit and understand what they, you know, what the proper use of that geolocation information is. and how it is an issue to people. >> we spoke with al franken about net neutrality as well. he is one of the senate's most vocal supporters of protecting the open internet. here is part of that conversation. >> basically what net neutrality has been about is allowing everyone's content to flow essentially to the consumer at the same speed. now the i.s.p.'s, the big internet service providers like comcast, like time warner cable, like verizon have talked about charging extra for a fast lane
so there would be a two-tiered system or multi-tiered system where a content provider would have to pay more for fast speed, and that would affect every business, it will cost consumers more because that cost will be passed on to you. all of the innovation that has taken place on the internet has happened not just while we have had net neutrality but because we have net neutrality. i used youtube as an example. before youtube, there was google video, which was not very good. three guys started youtube over a pizzeria in san mateo, california. it was better because it flowed at the same speed, and everyone was able to sample youtube and see it was better, so they chose that. a few years later, google and up buying youtube for $1.6 billion. facebook was started in a dorm
room. all of this innovation has happened because of net neutrality, and we don't want to put everything in the hands of deep-pocketed corporations who can afford to pay out for the fast lane and stifle all the innovation that would happen from the startups and from people in dorm rooms. and also just businesses that are operating, have a website, this affects the entire economy, and it is a bad idea. >> right. >> it obviously has first amendment implications as well. >> senator, let's talk about those companies. do they have a moral responsibility in the net neutrality debate? >> i think they do. the internet was created by the defense department, by the united states government.
they cannot act as gatekeepers. they don't own it. they don't own it. i believe -- yes, the point of the internet is not for comcast and verizon and time warner cable to make as much money as possible. it has other purposes. >> senator al franken, democrat from minnesota there. up next, we'll get a different take on net neutrality. we'll be speaking with michael powell, the former f.c.c. chairman, now head of the nation's top lobbying group for cable companies. ♪
>> welcome back to the best of "bloomberg west." i'm emily chang. for a different perspective on net neutrality and other key issues, our editor-at-large cory johnson spoke with michael powell, the former chairman of the f.c.c., now president and c.e.o. of the national cable and telecommunications association, the principle lobbying group for the cable tv industry. >> you should always be concerned to make sure your government is operating ethically and appropriately. i think it is a legitimate question. i think it gets overstated by simplistic looks. i left the f.c.c. for six years before i ever entertained a job in the industry. i had not only an ethical obligation, but a personal choice not to do any work for companies that i regulated for many decades. i'm a policy expert. i spent my life making my career
in the communications sector. it is pretty legitimate to ultimately have employment in that sector. >> is the policy so complicated when the f.c.c. is looking for someone, they have to go to tom wheeler, someone who has been paid so much money, whatever that is, by the industry? >> you to ask the president of the united states what goes into his choice for which he chooses as chairman. >> i would much rather talk to you. >> tom wheeler was in the trade business 30 years ago. is there a statute of limitations when you can return to public service? i think the country needs qualified, talented in-depth public servants. i think the president was looking for someone who had that background. he was widely heralded when the selection was made as somebody who had a deep understanding. i would argue yes, it is pretty complicated. >> talk to me about the membership companies. what they want, companies like comcast, time warner cable, what do they want in particular out of this ruling for net neutrality? >> our membership is pretty diverse. we have not only operators, companies like comcast, time
warner and charter. we represent all of the content companies like viacom, disney, and fox. >> in terms of revenue, who is giving you most of the money? is most of the money from one side of that? >> our dues are rated by subscription and size. it is obvious bigger members pay a disproportionate amount of the dues. it is well spread across the membership. i don't think that alone buys you direct influence over the choices the association makes. i would be the first to confess, yes, we lobby. we manage an enormous amount for the industry. we manage the industry's trade show. we manage the industry's development of public policy. we represent the industry like i'm doing today in the media. we sometimes are doing the legal work for filings at the federal communication commission or other arms of the government. i spend very, very little time on the hill in direct contact with members. that is not a big part of what i do in my job.
>> in this issue comcast and net neutrality, they gave a statement. they say we continue to believe that section 706 as opposed to title 2, and we'll get to that, provides more than ample authority to impose rules. comcast and cable companies along with the telcos have lead the broadband revolution. there is this big debate. title 2, which would make a public utility out of the companies that give us our internet, whether we're businesses or consumers, versus the existing regulations. what do you think? >> i think it is a perfect example where the means start confusing the end. i have never seen an issue where there is such violent agreement on the core objectives. everybody wants to stop blocking. everybody wants to prevent throttling. most of our companies have said they have no interest in paid prioritization, and in fact for 20 years, they have not engaged in practice even a handful of times that the commission can point to and everybody is in support of increased transparency. then you get into the legal minutia about the most effective way to do that.
that's when you get to this debate. >> title 1 with light regulation and title 2 with heavy regulation and wheeler's plan is kind of in between? >> yeah, in some ways, title 2, our greatest concern is not so much but the core net neutrality obligations, it is the unintended consequences of what else comes with it. title 2 is a body of regulations most heavy body of regulation that exists in the country. it was built for at&t as a monopoly during the last century. it is 1,000 pages in length. it has hundreds of rules that would make fundamentally no sense when applied to internet infrastructure. and the government can't, to our satisfaction, give you the confidence that it would rule wisely in the administration of those unintended -- >> we have really slow internet speed in this country compared to a lot of big countries with big businesses and big geographic footprints and a lot of other countries with smaller geographic footprints. compare us to france, we have slow internet speed.
compare us to south korea, we have less than half the speed they have. doesn't the current structure award companies for not investing so they don't have that kind of competition? >> i don't think so. i can cherry pick companies to compare to. the united states would look outstanding. of the top 16 regions comparable by five, 6 to 9 of them are united states. we're a country of 300-plus million people. much bigger geography. a more complex problem. look at the trend line. speeds have increased 1500% in a decade. the network doubles in speed every 18 to 24 months. right now we're increasing speed 50% annually. >> cory johnson and michael powell, former f.c.c. chairman, now head of the cable lobbying group, the ncta. can facebook, where people share everything from personal photos to intimate details about their lives, can it become a viable product for the workplace? we'll tell your about facebook's
>> welcome back to the best of "bloomberg west," where we focus on technology and the future of business. i'm emily chang. as facebook expands its business, it is targeting the workplace. the product would allow coworkers to connect with each other using all of the traditional facebook tools like messenger and newsfeed. cory and i spoke with a potential with our contributing editor david kirkpatrick. i asked how big a threat facebook is. >> yammer was feted to bring social networking inside the enterprise.
i think this is a business opportunity. i think there are a bunch of reasons to wonder why they would do what it needs to do to go after this opportunity. >> like what? >> are this is -- the market here is for businesses to outsource their internet to be run by facebook. that is the software that businesses are looking for. the reason we thought that would happen at yammer was employees want their internet to look like a social network. a they don't have the design expertise to do that. i do wonder on the security side of if they are going to want to do the things that enterprise
will want them to do. there is a question about whether they will be able to convince enterprises and employees that know the content would be co-mingled with the sort of consumer facebook. how these products are separate, it would be a little bit of a headache for them. i think that is a huge issue. there is the question of whether this is supportive to them. they would have to sell it. enterprise sales is not something facebook as though the past. >> does this signal expanding ambitions for facebook? >> their ambitions have been expanding anyway with the acquisition of instagram and whatsapp. i think there ambition is to connect everybody. they are aware that people don't
use it with as much approval at work as they would like. most people do use facebook at work. some companies still block it. there are a lot of reasons why facebook would want this to happen. i think david sachs has some good points. i do think it could work depending on how it was done. it is something they have talked about and up to now rejected for six or seven years. >> is this something that people in companies are actually going to be interested in using? or is it like google launching google plus? are they trying to get into one another's territory where there is already a monopoly? >> i think employees do want to use social internet at work. i think there are applications on top of that that employees need in their work. in the consumer world, photo is
the killer app on facebook. in the business world, it would have to be something different. i think that is probably filesharing. in order for this to work, facebook will have to develop not just a basic social feature but also something that is alike. they would have to do dropbox. if they want to go down this path, they have to commit to it. they need to make it a sustained development priority for years. i just don't know how important it is to them, if they really want to do that. >> david, somebody like reid hoffman has said for years that people want their professional and personal identities separate.
do they want separate companies to pursue these identities? >> that's a good question. linkedin is not trying to do this exactly. they are doing some things very successfully. i think david has good points. there is no monopoly at this point. most companies do not use internal collaborative tools. yammer is better than anybody else. it is now owned by microsoft. there is not a major player that really commands the marketplace here. most companies are very poor at managing internal collaboration. most people live their lives on e-mail and instant messaging and texting and that is primitive and inefficient for the world we are entering where companies need to innovate much faster. i think there is a market. that people are on facebook and know how to use it is promising for this kind of product. would facebook commit enough to this?
companies want to hire young people. they want to be cool for young people. if they could say to their young potential hires you can come here and do everything you do normally on facebook to work in our company, that can be very appealing. i could see why companies would like that. >> coming up, box has been stuck in the ipo pipeline for months. what is preventing them from going public question mark i will ask ceo aaron levy next. ♪
eight months have gone by and they still have not gone public. what is going on? i spoke with aaron levie on the latest edition of my show "studio 1.0." take a listen. you recently took on money from tpg and coatue management. >> we filed to go public in march. about a week after that, there was a market correction in the tech stock space. we saw some volatility and a lot of high-growth technology companies. we thought it was not the best time to bring a new company to market. we had amazing support from private market and late stage investors tpg and coatue management and they would support us as a private company.
we took that money on to continue growth without growing public. >> what is the status of the ipo? >> we are still in file, so there isn't lot that i can't share. you will definitely be one of the first people to hear about it once we share any updated thinking. >> have you wondered if you made a mistake in file too soon? >> we should not have filed when we did. we certainly dealt with a lot of distraction because of that filing. i think that whether that was news reports in the cycle that had to happen around the business, obviously that was brought on because the filing. that was a distraction to what
our focus is and has been witches execution and building the business. life is too short to have any specific regrets. we have remained in this full execution road. >> i am curious about what that moment was like you opened your books to the world. some he called box a house of horrors. >> we are competing against the biggest companies in the planet. to do that, you have to make a significant investment. that is an investment in research and development and infrastructure in our sales team and being able to go to marketing reach these customers. >> the criticism was the worst spending more on acquiring customers than you were making. >> every dollar we require is one that is recurring annually. our job is to keep customers happy and successful and compound that dollar overtime. we unveiled our s-1 at a time when new investments had outpaced the revenue scale. now we are at a place where we are growing out and compounding. we don't have as many significant investments. we have done a lot of the international expansion. we built out a lot of enterprise sales force.
you are seeing that efficiency play out over time. >> how much everything about selling box as opposed to going public? >> we want to sell our software to a lot of companies. we spend 0% of our time thinking about that. >> will box be a public company? >> it's likely. i would say yes in the sense that that is the path we are on. >> box ceo and cofounder aaron levie. can see the entire interview on "studio 1.0." grand theft auto v" is out, but does the latest addition take sex and violence too far?
>> welcome back to the best of "bloomberg west." i'm emily chang. grand theft auto, the notorious video game, but has grossed over $1 billion in sales is pushing the envelope even further. in the latest refresh, players can have graphic first-person point of view sex with a prostitute. does that cross the line? we spoke with two veteran watchers of the videogame industry. >> i would say they are trying to make a very mature story. it is a mature game. it is for mature gamers. it is not for kids. did they cross the line? not any more than they would in a movie or television show. >> take a listen to what he had
to say. >> this is a gritty underworld. it is art. i embrace that art. it is beautiful art, but it is gritty. let's not make bones about it. we stand shoulder to shoulder with other major motion picture releases and television shows that explore a similar universe. >> yes, we see murder in prostitution and killing in movies and television. is it different when you are a giving video gamers the opportunity to do it themselves? >> i think it is important to listen to what he said. they stand shoulder to shoulder with other entertainment mediums. we did not have the supreme court case that but video games at the same level as other entertainment medium. they are first amendment protected. i think you're going to hear companies defend themselves against the regular list me
criticism about violence and sex by saying look, this is art just like movies and tv. now we have a supreme court decision that agrees with us. discussing whether it is too far is extreme. it is censorship. don't play it or don't buy it. i think for grand theft auto, they can make that choice. i don't think it is supposed to be sexy. it supposed to be lurid and grim. that is what they are going for. they are going for gritty. >> what is the state-of-the-art of pushing the envelope? i could not believe some of the stuff. the violence is so much more disturbing. what is the state-of-the-art in pushing the envelope? >> that is the question that we haven't asnwered. when do they become so real that you feel guilty when you kill someone?
where is the emotional attachment? we are getting to the point with the graphic fidelity that we are getting close to that. i do think it is a good question and a good thing to ask any good debate to have. >> one of the things about grand theft auto is they are in a setting that is familiar. collins avenue. >> they are trying to make it feel as real as possible. >> it is a very visceral game. you do get very emotional while playing it. >> is that why are seeing the success of games where the enemies are less than human in those first-person shooter games? >> you are telling a war story. the player is a car thief, just like a movie. and games like a wargame, what
it gets gritty and really get post-traumatic stress disorder from playing videogame? is it going to get to that point? >> what up the first-person nature of these games and the emotional impact they have and how that plays out when you are a real person interacting in the real world after you play it? >> that's why we are having this. great the new grand theft auto came out last year. call of duty and games like that don't trigger this kind of response. what is it about grand theft auto that is upsetting? it's a real-world setting. i think it is a way the animation is done. you see your arms and legs. if you flip a car, you can see the sky through the windshield. it has a much different feel
than most of your first-person games. rockstar is betting that we will find this upsetting. that is their strategic decision. we wrote yesterday that it is dangerous again. after years of not being dangerous, it feels dangerous again. this is what they are good at. they are good at pushing the envelope and challenging players to ask themselves what they are comfortable with. there is a scene, a torture scene that made a lot of people uncomfortable. i think it was distasteful. that is what they are doing it. they want us to talk about this on bloomberg. >> i don't know. it's legal or not legal, can we talk about right or wrong? this seems like this is over the line to me. >> there is a certain thrill about it. >> don't have your kids and their moyer playing this game.
i won't play this in front of my kids. i will not play zombie games in front of my kids. >> don't watch a tarantino movie if your kids are in the room. >> watching a movie is different than doing it yourself in this videogame. i know it is technically not real, but it feels real. >> i'm not sure that it is that different for this generation. it's just another form of media. >> one of the sales for this game? >> sex and violence sells. there is no doubt about it. they are approaching 40 million sales. there are the new generation consoles. i'm sure they would get a good percentage. we may see this bumping up to 50 million soon. this is the biggest entertainment launch ever. they sold $1 billion in the
>> welcome back to the best of "bloomberg west." i'm emily chang. is bigger always better? serial entrepreneur kevin rose does not think so. he is on to his latest venture, an app that lets people share tiny photos. he just launched a refresh version tiny 2.0. i asked him how it works. >> when you think about instagram, they are curated experiences. you get your filters right. you describe what you are doing.
tiny is about little moments. you can record something and it loops over and over. you can't enlarge it. it is these tiny things that live in your profile that you share with friends and followers. a great example, ashton kutcher came on it posted a photo of his baby. it was awesome. we saw this tiny moment. he did not want load up. it was a tiny thing he could share to people that he cares about. >> that is truly awesome. how does it compare to snapchat, you are sharing tiny or less edited moments. then it disappears. >> it's not about the privacy. we do have a following model where you can come in and follow creative people. people are doing all kinds of skits or getting creative with it. there are different moments they
are sharing. they do every thing dog tricks to you name it. you see all of these animated looping over and over for you to consume. there are things you want to post and take the time to apply a filter or take the time to give at the right description and put it on facebook. we are not trying to compete with that. for us, it's about little things it you do throughout the day. you are having a good time or having a beer, whatever it may be. it just gets pushed out to everyone. >> you also launched watchville. this is a narrow focus. why would this be a big deal? >> there is always room for handcrafted niche markets. the internet is good at collecting all of these people and bringing them together under one roof. there are large in blogs for everything. they might be comic book collectors or delectable air jordans.
wristwatches are something that a lot of people are very into. the luxury goods space, this is not been touched. this could be anything from vintage handbags or luxury watches. for us, it's just an exploration in what it's like to create a custom breed news space. we might apply this to a different set of verticals. this is our first experiment and the luxury goods space. >> people could say this is just another photo sharing app. i won a note what you're strategy is. you are trying to build apps that are sink or swim. >> we were creating a new app every two or three months. we wanted to get something out there and see what happens and see what the tractio is like. >> kevin rose. that does it for this edition of the best of "bloomberg west."
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